Solutions
By Robert Higgans (pictured) & Clare Farrugia, MFSA – Since the end of the transition period applicable to Alternative Investment Fund Managers (AIFMs) that were undertaking activities before the coming into force of the AIFM Directive on 22 July 2013, a clearer picture is emerging on the preparedness of operators to conduct activities under AIFMD – a Directive which has attracted mixed reactions from various sectors, with some advocating the added advantages of increased investor protection and the passporting opportunities whilst others are highlighting the increased compliance costs, uncertainty and complexities that it has brought about.
Whilst AIFMD has posed various challenges
For a number of years, it has been practically impossible for funds to grant loans to third parties unless done on a one-off basis. Potential loan funds have, until now, not considered Malta.
The issue in this regard has always been a licensing one in that, in terms of the Financial Institutions Act, generally speaking the provision of a loan on a regular or habitual basis requires a financial institutions licence from the MFSA. This, coupled with the often strict interpretation of the MFSA as to what constitutes ‘lending’ and what constitutes ‘regular’ or ‘habitual’, has meant that funds have
For emerging managers, the fact that Malta retained its PIF regime alongside the new AIF fund regime means that a number of fund structuring opportunities now exist.
The most popular option, to date, has been for managers to register with the MFSA, obtain a fund management licence and launch a de minimis PIF. But according to Kevin Caruana (pictured), Managing Director of Custom House Global Fund Services (Malta) and David Barry, Head of Sales & Business Development, EMEA, there are other viable options to consider.
These include a de minimis self-managed PIF or the opportunity to join a pre-established
Retaining its Professional Investor Funds (PIF) regime is possibly the single biggest development for Malta in recent memory. The island is now home to over 600 MFSA-authorised hedge funds and whilst a number of those are now being transitioned into AIFs to comply with the AIFMD, the fact that small and emerging managers can choose whether to run de miminis funds outside the scope of the directive cannot be underestimated.
“Pre-AIFMD Malta’s PIF regime had already generated a lot of interest among managers. The MFSA performed mental acrobatics working out how it was going to retain the PIF regime alongside
“What we are seeing under AIFMD is increased interest in asset managers using Malta as a domicile for the setting up of AIFMs,” observes Kenneth Farrugia (pictured), Chairman of FinanceMalta.
He continues: “Over the past ten years, the MFSA has authorised quite a number of Category 2 management companies. In fact, as at 30th June 3014, the MFSA had authorised 99 category 2 companies, and when one considers the advisory and custody service providers there are around 132 asset servicing operators in Malta. Beyond the 620 funds currently authorised by the MFSA, we have started to witness cluster formation on
This summer, Peregrine Communications pitched its flag on 44th & Fifth, New York to further bolster its award-winning reputation as a marketing solutions provider. Overseeing the new office is Peregrine's Max Hilton.
“We’ve been working with US clients since 2002 but it became apparent that we needed to be on the ground. Sixty per cent of hedge fund managers are based in the US, and many of the investors into hedge funds, and New York and London are the two most important media hubs,” says Hilton.
‘We are making a major commitment with our new office in New York,” says Anthony
“Being able to wrap an alternative trading strategy into a ’40 Act fund structure is going to open up hedge funds to a far wider audience,” comments Martin Sreba (pictured), Senior Director, Global Solutions Management & Sales at Advent Software.
Registered investment advisers who have never before contemplated mutual funds are now looking over their shoulders as large traditional asset managers launch their own internal hedge fund strategies. This is producing significant convergence as both traditional and alternative managers look to tap in to the USD15trn mutual fund market.
Figures released by Barclays Prime Services show a 43 per
Jill Calton (pictured) is a managing director of the Alternative Investment Services division at UMB Fund Services. Over the past 12 months, the firm, which currently administers just north of USD31bn in alternative investment assets, has seen increasing inflows into credit strategies and private equity funds; particularly the latter.
“We have several existing private equity clients that are entering new deals and launching new vehicles. We’ve also taken on a few fairly large private equity groups this year who have rotated out of other administrators. In addition, an increasing number of private equity managers who previously did fund administration internally are
The continuing institutionalisation of the hedge fund industry can be illustrated by a growing demand among managers – and indeed their investors – for shadow administration. Market regulation is pushing firms to stay operationally compliant. As a result, hedge funds need to be comfortable, and confident, that the investment books and records are accurate.
To do this requires an additional set of eyes; someone who is watching the watchers.
“Do you build an operations team that fully shadows the books and records? Do you put in review controls to get comfortable with the administrator? Or do you appoint a
Linedata has launched Linedata Disclosure Manager, an automated compliance monitoring service.
The service allows firms to manage regulatory obligations across multiple jurisdictions while avoiding costly fines and penalties for non-disclosure.
As financial markets become increasingly more complex and global in nature, a lack of global harmonisation of shareholding disclosure regimes presents a major challenge for firms to manage regulatory obligations. These challenges range from monitoring and understanding transparency requirements set out by various regulatory authorities to aggregating and calculating required disclosures across a large number of sophisticated investment vehicles with complex ownership structures.
Linedata Disclosure Manager automates the
